Did You Participate In Any Of Koncar - distributivni i specijalni transformatori d.d's (ZGSE:KODT) Fantastic 155% Return ?

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. One great example is Koncar - distributivni i specijalni transformatori d.d. (ZGSE:KODT) which saw its share price drive 114% higher over five years. Meanwhile the share price is 1.4% higher than it was a week ago.

Check out our latest analysis for Koncar - distributivni i specijalni transformatori d.d

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the five years of share price growth, Koncar - distributivni i specijalni transformatori d.d moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Koncar - distributivni i specijalni transformatori d.d's key metrics by checking this interactive graph of Koncar - distributivni i specijalni transformatori d.d's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Koncar - distributivni i specijalni transformatori d.d the TSR over the last 5 years was 155%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's good to see that Koncar - distributivni i specijalni transformatori d.d has rewarded shareholders with a total shareholder return of 9.1% in the last twelve months. And that does include the dividend. However, the TSR over five years, coming in at 21% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Koncar - distributivni i specijalni transformatori d.d .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HR exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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